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(updated January 16, 2002)
Peter Lewis joins EPR - Alberta
Effective January
2002, Peter Lewis announced the merger of his practice with the Calgary
office of EPR - Alberta (Evancic Perrault Robertson - nationally). EPR
has over 38 offices across Canada and is currently the 14th largest accounting
firm in the country. (www.epr.ca)
EPR - Alberta is developing
a One-Stop-Shopping concept for accounting and related professional services.
The financial planners, Legacy Wealth Management/TWC Financial Corp. and
the full service legal firm, Milne and Company, share the office space
at the Calgary office.
Budget - December
10, 2001
Personal and corporate income tax initiatives announced during 2000 remain
largely unchanged in the December 10, 2001 budget. Personal tax changes
effective January 1, 2001 remain in effect into 2002 and beyond with most
personal exemption, income brackets and thresholds increasing due to the
3% indexing.
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Personal Tax Changes
effective January 1, 2001
- Personal tax rates,
the federal portion only, are reduced from 17% to 16%, from 26% to 22%
and 29% to 26%. In addition, the threshold at which the highest rate
(29%) is applied has increased from $61,510 to $100,000.
- Alberta now has
a flat tax of 10% on net income (TONI)
- The 5% federal
deficit reduction surtax is eliminated.
- The 8% Alberta
deficit reduction surtax is eliminated.
- Self-employed
individuals are able to deduct the "employers" portion of
CPP contributions as a business expense. The other half continues to
qualify as a tax credit.
- Disability tax
credit is raised to $6,000 (from $4,293).
- Caregiver tax
credit is raised to $3,500 (from $2,386).
- Education tax
credit is raised to $400/month for full time attendance and to $120/month
for part-time attendance (from $200 and $60 respectively).
RRSP Reminder
Tax payer's should review their 2000 CCRA Notice of Assessment to confirm
how much can be contributed to an RRSP for the 2001 tax year. Your tax
return cover letter should also show the same contribution limit. If there
is a difference between the 2000 cover letter and the CCRA Assessment
contact Peter Lewis as soon as possible to review the issue.
Common-law Status
- Not a choice
Canada Customs and Revenue Agency continues to wrestle with the question
of defining who is a common-law spouse. The basic elements of the definition
include cohabitation with a taxpayer in a conjugal relationship and that
the cohabitation period is at least twelve months. While there are issues
related to the defining of spouse, spousal status is not meant to be optional.
Taxpayers should be aware that CCRA is becoming more aggressive in assessing
'common-law' relationships.
Medical Expenses
definition 2001 and onward
Medical expenses are now include therapy costs for persons with severe
and prolonged disabilities, costs for the care and supervision of the
persons with severe and prolonged who live in a group home, the cost of
tutoring persons with learning disabilities or other mental impairments
and if the individual has a perceptual disability, taxpayers can also
claim the cost of talking textbooks prescribed by a medical practitioner
in connection with an individual's enrolment at an educational institution
in Canada.
Corporation Tax
Changes for 2001 - 2002
- Tax rates are
still on their way down. General tax rate is down 1% to 27%. On a small
business income between $200,000 and $300,000 the general tax rate is
down to 21%.
- Alberta tax rate
on small business income down 1% to 5% on an increased business limit
of $300,000
Auto Deduction
Limits - No Change 2001 - 2002
- Automobile expense
reimbursement remains at $.41 per km. for the first 5000 km and $.35
per km. for over 5000 km. in the year.
- Auto costs allowable
remain at $30,000 plus taxes.
- Lease costs at
$800/month and interest cost of $300/month are the same for 2001 and
2002.
Contact Peter Lewis
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